On 26 March 2025, Chancellor Rachel Reeves outlined economic changes that could impact therapists, especially those who are self-employed. Here’s what you need to know and how we can help you prepare.
Key Changes Affecting Therapists
1. Tax Penalties—Avoid Extra Costs
From 6 April 2025, late payment penalties for VAT and self-assessment will increase. If you’re self-employed, staying on top of tax deadlines is crucial. Your accountant can help you avoid fines and manage cash flow efficiently.
2. Benefit Cuts—Impact on Clients
With £14 billion in welfare cuts affecting Universal Credit and PIP, some clients may struggle to afford therapy. This could impact your income, so consider flexible payment options or alternative revenue streams.
3. Growth in Online Therapy—Opportunities for Digital Expansion
The government is investing £3.25 billion in digital transformation. If you offer online therapy, now is a good time to explore new tools or platforms. Your accountant can advise on tax deductions for digital investments.
4. More People Entering Work—Increased Demand for Therapy.
Welfare reforms may push more people into work, leading to higher stress levels and greater demand for mental health support. If you’re thinking of expanding your practice or hiring, speak to your accountant about tax-efficient ways to grow.
Next Steps
- Stay Tax Compliant: Work with your accountant to meet deadlines and avoid penalties.
- Review Finances: Check how benefit changes may affect client payments and plan accordingly.
- Explore Growth: Look into digital tools, business support, and tax reliefs that could benefit your practice.
By planning ahead, you can navigate these changes with confidence and keep your therapy practice financially secure. Speak to us for tailored advice.